The Spoils of the Mexican Revolution

The Mexican Revolution is doing well-not the grievous struggle for justice that started 60 years ago, in the ancient past before the First World War, but the famous economic boom that Mexican entrepreneurs have executed in the present generation. The old days of revolt are gone-the days of dictators falling, grimy rebels storming into the towns, cotton choppers and mechanics debating in sovereign assemblies. The grand staging of the Olympics two years ago gave proof that the business of the Mexican Revolution is now business.

In Guadalajara and Ciudad Juárez, in Monterrey and León, in Puebla and Mexicali, in scores of smaller cities, above all in Mexico City, the shimmering new buildings teem with transactions and accountings into the future. Already Mexicans run up bills on three credit cards of their own nationality, Bancomer, Bancomático and Carnet Bancario. This summer the Bolsa, the sedate old stock exchange in downtown Mexico City, will very likely go as modern as Milan's Borsa or Tokyo's Kabutocho, to excite closed companies into public issues of stock, to relieve harried banks, to multiply private investment. Also this summer national elections will take place; and under the auspices of the government, in patriotic showers of red, white and green confetti, the party that (under similar auspices) has won the last seven presidential elections, the last 14 congressional elections, and the last 200 gubernatorial elections, will elect overwhelmingly its candidate, whose slogan is "Upward and Onward!"

Why did the old struggle for justice-violent, confused, but intent-turn into the new drive for development? How did the Revolution become a bonanza? Analysts of the metamorphosis disagree, whether they are Mexican or non-Mexican. Some accept the change as a case of the logic of revolution, Mexico's Reign of Virtue inevitably cooling into Mexico's Thermidor. Others allege that the change was a matter of choice, that until 1940 Revolutionary presidents deliberately pushed for social equality, and that since 1940 they have deliberately indulged native businessmen. Those resenting the bonanza decry the change as corruption, or subversion, if not betrayal. Those favoring the bonanza welcome the change as the Revolution's happy fruition. Of all the theories the last is probably the truest, although not for the reasons its advocates have adduced, and not in the spirit they have evinced.

Reviewed through an historical argument, the great change in the Mexican Revolution from 1910 to 1970 happened inadvertently. The gist is that the original Revolutionaries, genuine "sons of the people," never outgrew their memories of frustration, rarely imagined policies more creative than revindication, once in office discounted the chance of novelty in national or international affairs, and got surprised into development, which their heirs now enjoy and justify as if it had happened on purpose. Disappointment or delight, the change was a realization of popular prejudices that few Revolutionaries understood and none knew how to avoid.

Thus, beginning in 1910, several movements attacked the régime of Porfirio Díaz, a dictatorship that conceded foreign domination of the economy. Demanding free politics were the liberals, whose martyr was Francisco I. Madero. Demanding land were the villagers and peons, whose champion was Emiliano Zapata. And out for kicks and spoils were the rowdies, whose hero was Pancho Villa. Later, while these movements continued, there were gangsters, whose typical boss was Manuel Peláez, and a nationalist movement for a natively dominated economy, whose head was an old politico, Venustiano Carranza, but whose force came from entrepreneurial characters like Alvaro Obregón and Plutarco Elías Calles. Constituting altogether the original Mexican Revolution, they did destroy the Díaz régime. Then they fought among themselves, to settle which movement would predominate. As the costs of the fighting were awful, the expectations from victory were immense. But the Revolutionaries had no notion of developing the country. They assumed that the economy would naturally recover.

By 1920 the chiefs definitely in charge of Mexico were nationalist entrepreneurs. Sincerely believing that only the operations of their class would bring gains to their fellow citizens working in factories and fields, they established themselves as the guardians of the national welfare. Wary of foreign interests that remounted in the country, they fortified the Revolutionary state to defend their claim. In the process they constructed an official party that represented a new dictatorship. Throughout their generation they would try to resolve the contradiction between their authoritarian deals and their democratic ideals. But for 15 years they did not try the resolution of development. Nor was it going on by itself. By 1935 the real GNP and the population were each only 10 percent larger than in 1910, registering no economic growth.

From 1935 to 1940 a maverick Revolutionary president, Lázaro Cárdenas, sponsored dramatic reforms in Mexico's political and economic structures. Intending to give workingmen their own voice in the Revolutionary state, he sanctioned hundreds of strikes, entitled almost a million landless families to farm nationalized property, and coöpted confederations of industrial unions and agrarian leagues into the Revolutionary establishment. (Actually he consolidated the Revolutionary state's control over the working class, urban and rural, a control which later entrepreneurs would use to their advantage.) Development was on his mind, but only in vague visions. As a spokesman revealed, "We have dreamt of a Mexico of agricultural coöperatives and small industrial communities, electrified, with sanitation, in which goods will be produced for the purpose of satisfying the needs of the people; in which machinery will be employed to relieve man from heavy toil, and not for so-called overproduction." In his bravest burst of nationalism, Cárdenas expropriated the biggest foreign oil companies, guaranteeing domestic sources of energy for the new factories that he could only hope national entrepreneurs would found. During his reign the economy did grow. But the growth was less than one percent a year.

In 1940 the prevailing political wisdom was to retrench. In economic activities the incoming president recommended "sensible and patient" behavior. But suddenly and surprisingly, because the Second World War yanked the country into opportunities that Revolutionaries had not foreseen but that were rich and easy, Mexico began to develop. By no official plan the real GNP expanded through the decade by 70 percent, while the population expanded by 27 percent. The entrepreneurs had the initiative, and on their behalf the Revolutionary state held the industrial unions and agrarian leagues in subordination. That the real national income increased through the decade by almost a half, and that the share in profits and rents averaged 46 percent, while the share in wages averaged 24 percent, was a trend so sweet as to swell real gross national investment by 230 percent Under President Miguel Alemán a second generation of nationalist entrepreneurs emerged, sharp, smooth and self-confident, ready to take foreign backing and still make their own decisions. Most noteworthy was their promotion of manufacturing, which almost doubled the volume of the country's industrial production. Despite inflation, devaluation of the peso, and slippage in real wages, the bonanza was on.

Through the 1950s the government had its economists give "technical" advice on development. In the abstract, the técnicos insisted on the welfare of all classes. "In practice," said the president in 1959, "there is no possible conflict between private enterprise and the state." The results of the collaboration were impressive. Despite repercussions from two American recessions, more inflation, another devaluation and major strikes, the real GNP expanded through the decade about 20 percent more than the population. Of the increased national income the share in profits and rents still averaged 45 percent, which swelled real gross national investment by 108 percent. The volume of industrial production again almost doubled.

In 1962 the government finally committed itself to devising a plan for development. Through the last decade the real GNP expanded annually about three percent faster than the population. Financiers and proprietors still thrived, and wage-earners still slumped. Real gross national investment rose 100 percent again. And the volume of industrial production more than doubled. By 1970 Mexico's economic growth is so spectacular that the Minister of the Treasury has to deny that it is miraculous.

II

As the development has been a surprise, so are many of its consequences. Now featured in the economy, for instance, is a significant American investment-around $1.5 billion, probably 12 percent of total investment in Mexico (which is double the proportion of all foreign investment in Latin America as a whole), and mightily packed into the country's mightiest corporations (like Asarco Mexicana, Celanese Mexicana, the Dupont complex, Union Carbide Mexicana). Also obvious is the concentration of wealth. Probably two-thirds of the private capital in the country is at the disposal of five percent of the entrepreneurs. Almost half of the national income goes into the hands of one-tenth of the nation's families. These are virtual barons of the realm-Manuel Espinosa Yglesias, Miguel Alemán, Bruno Pagliai, Carlos Trouyet, Antonio Ruiz Galindo, probably 50 others not quite so magnificent but still bullish, all quick and heavy powers. And they put their wealth proudly on display, in their shiny Mercedes, their viceroyal mansions, their glorious weddings, their glamorous parties splashed in glossy color in the Sunday photo section. Meanwhile probably 75 percent of Mexican families live on $120 a month, or less; and sick of Revolutionary rhetoric, tired of grease and grit, craving room and rest and meat, they have turned bitter. To a nationalist convinced of the need for national independence and national harmony, this is a disturbing trend.

But even if the change in the Revolution was inadvertent, even if it is ultimately disturbing, the entrepreneurs now dominant in the country are determined to keep it in effect. Certainly they cannot dictate events. Since their interests vary, at least as they express them in the National Confederation of Chambers of Commerce, the Confederation of Industrial Chambers, and the National Chamber of Manufacturing Industries, they do not concentrate their pressure-they confederate, but do not concentrate. From another angle they must consider American interests, commercially and financially. Since Americans still do around 65 percent of Mexico's foreign trade, and since they now have big stakes in the country's biggest businesses, Mexican entrepreneurs shape their strategy in order not to scare them-to annoy them, which is fair enough, but not to scare them. From yet another angle they must consider other Mexican interests, the bureaucracy, the army and the confederations of industrial unions and agrarian leagues. That is, they must behave solicitously toward the political establishment, especially toward the president, who keeps the other major interests in line. Since the Mexican élite remains human, however brilliant its record of control, the entrepreneurs in charge adjust their pursuits in order not to provoke crises-problems, of course, but not crises.

Certainly also they are not deficient in feelings of national responsibility. Condumex, for instance, an Anaconda affiliate, maintains in Mexico City an excellent center for research on Mexican history. The Fundidora de Fierro y Acero helps support the best university in Latin America, the private Colegio de México in Mexico City. Companies do even take temporary losses in gestures reckoned in the service of the nation.

But the development in which the big entrepreneurs flourish is a system the big entrepreneurs will defend. On their own initiative and for their own benefit they define the terms in which their compatriots make their living- the competitive strain for profits and wages, the terms of capitalism. And they mean to go on defining them.

Politically they are determined to keep the régime they have, "a licensed democracy." Its canon that politics is administration is a principle they hold devoutly, deflecting public queries from major to minor authorities. Its close constraint on the struggle for office and the debate of issues is a policy they endorse, to confine contests to safe matches and to censor criticism of the country's development. This regulation they see as the strategic key to the nation's sovereignty. Without official controls on politics, Mexico would suffer serious internal conflicts, which would invite American interference, if not intervention. Without repression nationally, Mexico may not remain independent internationally. Government there is an exercise in schizophrenia, and in tragedy. But it is nevertheless resolute.

Typical of the approved politics is the recent amendment of the Constitution, to include single 18-year-olds among the electorate. (Married 18-year-olds already have the vote.) Procedurally the reform was always in official control. Two years ago the president allowed that single 18-year- olds should vote. Congressional committees then dutifully investigated the question. So did agencies in the official party, the Partido Revolucionario Institucional (PRI), and in the house opposition, the rightist Partido de Acción Nacional, the leftist Partido Popular Socialista, and the geriatric Partido Auténtico de la Revolución Mexicana. On official cues, praise resounded for the proposal. And last January the amendment became law. Moreover, the reform will improve official controls. The PRI is now organizing 14-year-olds, to save them from early political deviation and prepare them for electoral conformity. No fuss, no muss, no bother.

Objectionable politics is the kind no superior can "discipline." It ends in repentance, or badly. Reflect on the fate of Carlos A. Madrazo. In 1964 the incoming (now outgoing) president named Madrazo to run the PRI, and bade him, friend of the family, ardent political ally, and past master of intrigue, to reform the party. Madrazo promptly advertised several shocking promises-open party primaries (rather than gubernatorially rigged rituals) to nominate candidates for municipal elections; university students in prominent party posts, to attract youth into the party; a Commission for Honor and Justice, to expel racketeers from the party; the formal registration of party members, to indicate how much patronage each sector of the party deserved; the collection of individual financial pledges, to build the party's own resources and release it from reliance on official subsidies. In prospect was the removal of the PRI from official control, the construction of an independent party. Even more shockingly Madrazo acted to fulfill his promises. At once he outraged the establishment and embarrassed the president, and in 1965 had to resign. But he would not properly retire. Continuing to politick publicly around the country, flattering the youth, bewailing economic inequities, finally fishing for a following among student rebels in 1968, Madrazo became a trial to the régime. He died in a suspicious plane crash near Monterrey last year.

III

Illegitimate politics, persistent politics without official license, always ends in disaster. The grimmest lesson is from the movement that broke out in 1968. Reported abroad as a student riot, described officially as a seditious conspiracy, this was at heart a civic movement for civil liberties. It had no particular martyr, champion, hero, boss, chief, sponsor or organization, only the solidarity of indignant citizens. Starting in Mexico City as a student defense of the universities against police intervention, it quickly matured into an offensive campaign of wide popular appeal against the government. Through the grand avenues of Mexico City-Insurgentes, Reforma, Juárez-not only students but also their parents, their teachers and many tens of thousands of office workers, housewives, shop workers, professionals and petty merchants marched in massive demonstrations to protest official abuse of civil rights. Militants demanded revocation of two articles in the Penal Code, 145 and 145A, which provide a sentence of two to 12 years for anyone convicted of spreading ideas that "tend to produce rebellion, sedition, riot or insurrection." Ordinary demonstrators demanded simply that the Constitution have the respect of men sworn to respect it. Out of the uproar the forbidden question came clear-If Mexico could afford the Olympics, could it not afford free politics? But the answer remained no, because free politics would introduce strategic risks that the nation's entrepreneurs would not admit-in an open régime their American rivals could press harder for advantages, while their native critics could press harder for redistribution of income, or even structural reforms. These dangers the government recognized in denouncing the demonstrators as tools of the CIA and the communists. All summer long in 1968 it tried to contain them, politically and forcibly. In a crisis just before the Olympics it had to crush the movement. And on the rainy evening of October 2, in Tlatelolco Plaza in Mexico City, the army surrounded a rally of 10,000 and machine- gunned the crowd, killing probably 50, wounding probably 1,000, arresting 1,500.

Official harassment still continues. Since the Tlatelolco massacre at least five small rallies of the movement in Mexico City have been violently dispersed. A few student leaders have been suspiciously murdered. Many others have gone into hiding, and at least three have gone into political exile-one ironically in Spain, another in Chile and another in the Uruguayan embassy. The poor souls that the police have in jail suffer special persecutions. When 81 of them in the Lecumberri Street prison in Mexico City carried on a hunger strike last winter, to protest their detention for more than a year without bail or trial, the warden had other inmates assault them. If they are not strictly political prisoners," as the government insists, they are in a purgatory not far from the hell of those who are political prisoners in Greece or Brazil.

IV

The president due in December, Luis Echeverría, is a perfect paladin of the established régime. In 1945, as a sober, intense 23-year-old law student, one more bright young Mexico Cityian on the make, with no inheritance or connections to speak of, he married into a big political family wholeheartedly provincial and nationalist in the old Revolutionary style. A year later he was recruited into the PRI by its chief, and put through basic training for a modern career of national service. In 1954 he was awarded the third-ranking office at the Ministry of Education, from which post in 1956, after "communist-inspired riots" at the National Polytechnic Institute, he helped arrange the army's occupation of the school. In 1958 he graduated to undersecretary of the Ministry of Interior, where he helped his superior, Gustavo Díaz Ordaz, arrange the routine PRI victories in congressional and state elections, crush a "communist-inspired" strike among railroad workers, and gather intelligence on Fidelista movements. In 1963, when Díaz Ordaz moved up to become president from 1964 to 1970, Echeverría moved up to minister of interior. There he had the responsibility for arranging the routine PRI victories, as well as the smashing of two big "communist cells," the military or police occupation of several state universities, the closure of a major leftist (Fidelista) magazine, the crushing of the 1968 movement (which involved military occupation of the National University and the Polytechnic), the imposition of the official script in TV and radio newscasts, and the correction of two PRI bungles of gubernatorial elections. Of the various presidential hopefuls last year, he was certainly the toughest, the handsomest, the canniest and the most discreet. Now that the army is feeling its oats, his civilian mastery of the mysteries of internal security makes him politically more attractive. Although Echeverría had never run for elective office before, he projected a fine charisma during the recent campaign.

The new president will probably direct a new political drama. Therein the bureaucracy is likely to play the villain, in an act of contrition for its suspected complicity in the 1968 movement. The army and industrial unions are likely to have sympathetic but only supporting roles, since they already received their rewards last year-a lavish military raise and an expensive Labor Law. Impoverished farmers are most likely to star as the deserving innocents. "If the vote of the people favors me and I am elected President of the Republic," the candidate said last fall, "I will not be able to sleep at night during the six-year term unless I have the certainty of having done that day something for the agricultural progress and the welfare of the peasants." Intellectuals he has tried to reassure that he will bear no grudge against their criticism. But on the strategic question of public action he has let slip no hint that he will mollify the official fury against objectionable or illegitimate politics. If in school, as he believes, "It is Revolutionary to study, . . . counter-Revolutionary not to study," then in matters of state it is Revolutionary to take orders for granted. By all signs the presidency of Echeverría will be more vibrant and vigorous than the past administration, but no more liberal.

V

Economically Mexican entrepreneurs are determined to seize more initiatives in the boom. Their main concern is American investment, that it keep flowing in but that it not flood them. Speaking for the nationalist entrepreneurs, Echeverría has prescribed that foreigners who are technologically and financially necessary for development should have a "completely secondary" part in it. The formula for native primacy, however, is still only "Mexicanization," a conversion not compulsory but negotiable.

A classic case is the sulphur industry. Because of increasing American and European demands for the mineral, sulphur beds along the southern Veracruz coast were opened in the mid-1950s. As the demand went on growing, the Veracruz field became yet another Mexican El Dorado. Production expanded from 89,000 tons in 1954 to 1,650,000 tons in 1964. The profits of the successful were fat and steady, probably 15 percent to 25 percent a year. But for Mexican entrepreneurs the industry had two faults. It was an entirely American business, organized under the Pan American Sulphur Company (PASCO) and the Gulf Sulphur Corporation. And it was almost entirely for export, requiring Mexico's new chemical and fertilizer industries to import most of the sulphur they needed. In 1954 Mexican entrepreneurs started staking their claims. Through the government they first pressed PASCO, which did four-fifths of the business, to "Mexicanize." And in 1967 PASCO sold 66 percent of its stock to Mexicans. Shortly the Mexican demand for sulphur had a full Mexican supply. Then the pressure mounted on Gulf Sulphur, reorganized as the Gulf Resources and Chemical Corporation. Last year Gulf Resources was ready to sell 66 percent of its stock to Mexicans; when it could not get the price it wanted, it pulled out. Now the sulphur industry in Mexico is predominantly a Mexican business. The transfer was not, as Senator Russell B. Long complained here in defense of PASCO and Gulf Resources, "a subtle form of expropriation." PASCO, which was paid $66,000,000 for the stock it sold, only had to diversify its interests; on the 34 percent share it retained in the industry, it enjoyed a higher rate of profit than before. But the transfer was a form of nationalization, the enforcement of a Mexican entrepreneurial claim to benefit most from the resources on Mexican soil.

From other Mexican classes that might restrain them and reform the boom, pushing the state into so much production that the public sector devours the private, Mexican entrepreneurs have little to fear. With support from foreign loans the state does invest heavily in the economy, to the extent of 40 percent to 50 percent of total investment. The government, for instance, bought almost two-thirds of the stock that PASCO sold in 1967. But official investments, as the director of the biggest public investment bank never tires of explaining, are "fundamentally channeled into infrastructure"-to encourage private enterprise, not to displace it. The gross production of the private sector is three or four times that of the public sector. If Echeverría believes, as he says, that it is "those who live by their own labor . . . above all others, who are entitled to enjoy the fruits of the nation's progress," the entrepreneurs know that the progress goes "upward and onward" as they themselves above all others prosper. Indeed in the present economy, where labor is not at a premium, they prosper only as many others languish.

The Revolution having changed, and national capitalists having confirmed their claim to rule, they now knit Mexico firmly into the patterns of international capitalism. The only mortal danger to their régime would come from a rupture of the international finance and trade that are its matrix. Only then would the old grievous struggle strengthen in the country. Only then would the heritage of revolt have new partisans, ready for more fighting in the hope for justice. Until then the modern Mexican Revolution will go on in a flashy calculus of stability and growth, balance and development.